MUTUAL RELEASE AND SETTLEMENT AGREEMENT
This Mutual Release and Settlement Agreement ("Settlement Agreement") is
made and entered into by and between Fightertown Entertainment, Inc. f.k.a.
Xxxxxx Aero, Inc., a Delaware corporation, and each of its successors, and
predecessors in interest agents, servants, employees, owners, shareholders,
officers, directors, partners, associates, attorneys, representatives,
assignees, associations, partnerships, corporations, and subsidiaries
(collectively, "Fightertown"), on the one hand, and Tellurian, Inc., a Delaware
corporation, and each of its successors, and predecessors in interest, agents,
servants, employees, owners, shareholders, officers, directors, partners,
associates, attorneys, representatives, assignees, associations, partnerships,
corporations, and subsidiaries, and Stu French, on the other hand
(collectively, "Tellurian"). Tellurian and Fightertown collectively are referred
to as Parties. This Settlement Agreement is based upon the following recital of
facts.
RECITALS
1. Disputes having arisen between the parties hereto as alleged in that certain
action entitled Fightertown Entertainment, Inc. f.k.a. Xxxxxx Aero, Inc., a
Delaware corporation v. Tellurian, Inc., a Delaware corporation, and Stu French,
an individual, United States District Court, Central District of California Case
No. SACV 97-736 GLT (EEX) (the "Lawsuit")
2. In pursuance of the desire of the Parties to settle these disputes, arising
out of the Lawsuit, and all claims that could have been brought by the Parties
related to the facts described by the Lawsuit, on the terms and conditions set
forth below, the Parties now desire to settle all of their disputes.
AGREEMENT
3. NOW, THEREFORE, in consideration of the terms, conditions and covenants set
forth herein, the PARTIES hereto agree as follows:
4. Nature of Settlement Agreement
This SETTLEMENT AGREEMENT constitutes a fully executed settlement
instrument, accord and a specific release of all claims past, present, or future
which may or could be made arising from the Parties' disputes and controversies
relating in any way to the facts described in the Lawsuit.
5. Payment
Tellurian agrees to pay Fightertown Entertainment, Inc. the following at
the listed times:
(1) Tellurian will deliver to Fightertown Entertainment, Inc. at its Lake
Forest, California
address, five (5) Eagles by November 13, 1997. Although Fightertown prefers
these Eagles to be configured individually, these Eagles will be configured in
one tower since Tellurian, Inc. does not currently have enough unassembled stock
to deliver these as single units. Tellurian will deliver to Fightertown
Entertainment, Inc., at its Lake Forest California address fifteen (15)
additional Eagles within 7 days of the signing of this RELEASE. Although
Fightertown prefers these Eagles to be configured individually, these Eagles
will be configured in one tower since Tellurian, Inc. does not currently have
enough unassembled stock to deliver those as single units. However, each tower
of five Eagles shall be configured for five individual simulators. Tellurian
will replace these four towers of five Eagles each with twenty (20) single units
no later than January 31, 1998, by delivering the twenty single units to
Fightertown Entertainment, Inc. at its Lake Forest, California address no later
than January 31, 1998.
Tellurian will deliver an additional five (5) single Eagles to Fightertown
Entertainment at its Lake Forest, California address also by no later than
January 31, 1998. Therefore, by January 31, 1998, Fightertown Entertainment,
Inc. will have received a total of twenty-five (25) Eagles delivered to its Lake
Forest, California address from Tellurian. Within a commercially reasonable time
after receiving the twenty-five (25) single units from Tellurian, Fightertown
Entertainment, Inc. will return the four towers of five Eagles to Tellurian,
Inc. The Eagles returned by Fightertown Entertainment, Inc. to Tellurian, Inc.
will be in good repair.
(2) Tellurian grants good title to Fightertown, Inc., free and clear, and
relinquishes all interest in eight (8) AT-200 units currently in Fightertown
Entertainment, Inc. a possession, as a part of the settlement of this Lawsuit.
Tellurian will turn over title to these eight (8) AT-200 units within seven (7)
days of signing this Release.
(3) Upon the delivery of the total of twenty-five (25) Eagles to Fightertown
Entertainment, Inc. by Tellurian, Inc. and the turning over of title to the
eight (8) AT-200 units described above, the order originally entered into in
January of 1994 will be considered complete. No further cash payment will be due
from any of the Parties other than that set forth in sub-paragraphs (9) and (10)
of this section of the Settlement Agreement. Tellurian, Inc. will keep the
payments made to date by Fightertown in full settlement of the twenty-five (25)
Eagles covered in this document and the ten (10) Eagles shipped earlier this
year as well as for the eight (8) AT-200 units described above. Tellurian will
receive a limited right to use the Fightertown name in its Cyberport Niagara
subsidiary as noted in sub-paragraph (10) of this section of the Settlement
Agreement as part of the total compensation it receives for these 43 units.
(4) Fightertown will have the right to purchase from Tellurian up to 30
additional Eagles at any time on or before June 30, 1999 at a price of $6,000
FOB Mahwah, New Jersey. At the time a firm delivery date is negotiated,
Fightertown will place a 50% deposit with Tellurian and pay the remaining 50%
thirty days after shipment of the units.
(5) Tellurian recognizes that a purchase of the magnitude covered by the various
points of this agreement makes Fightertown largely dependent upon Tellurian for
replacement systems and maintenance components. As a part of this settlement,
Tellurian grants Fightertown Entertainment, Inc. a license to manufacture Eagle
Boards for its own use without paying
royalties to Tellurian if for any reason Tellurian, Inc. is unable to supply
Fightertown Entertainment, Inc. with such boards within thirty (30) days of
Fightertown placing an order for the boards. Tellurian will cooperate in making
available to Fightertown Entertainment, Inc. such written materials as it may
normally have in the course of business operations to allow Fightertown
Entertainment, Inc. to accomplish this objective immediately upon request by
Fightertown Entertainment, Inc.
(6) Fightertown requested a confirmation that Tellurian does not intend to build
themed game units using jet fighters as a component of the experience and
Tellurian hereby gives this assurance, and agrees not to build themed game units
using jet fighters as a component of the experience. Tellurian in making image
generators and does not ensure that these image generators will not be used by
third parties to create a jet fighter environment. Additionally, Tellurian is
able to offer jet fighters in free standing game units designed for arcades.
Tellurian will not, however, build for Tellurian's use or knowingly build for
the use by a third party a jet fighter based experience in which the image
generators would be housed in a fuselage resembling any type of airplane or in
any way intended to be used in an experience similar to that which Fightertown
employs.
(7) Tellurian will soon introduce to the market its virtual reality helmet. This
unit may have application for Fightertown Entertainment, Inc. Tellurian is also
working on a new generation Eagle which would employ textured images. This may
also be of interest to Fightertown. As part of our partnership relationship,
Tellurian will assure Fightertown that no other customer will receive a lower
price for these units than the price which will be offered to Fightertown
Entertainment, Inc. for units it purchases for its own use. Tellurian would
reserve the right to sell of place promotional units in small quantities to
potentially new users of these products without violating this agreement with
Fightertown Entertainment, Inc. at the same or lower price.
(8) Tellurian will provide Fightertown, Inc. with programmer work described on
attached Exhibit "A" entitled "Addendum" and in strict adherence to the
time-frame described in Fightertown Entertainment, Inc. unlimited access to and
use of Tellurian's object library as described by attached Exhibit A entitled
"Addendum."
(9) Tellurian will pay Fightertown Entertainment, Inc. $20,000 by no later than
January 31, 1998, in the form of a certified check made payable jointly to
Fightertown Entertainment, Inc. and its lawyer Taras Kick, delivered to The Kick
Law Firm, 000 X. Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, 00000. Fightertown
Entertainment, Inc. agrees to provide Tellurian, Inc. with consulting duties for
this payment. These consulting duties would be limited to an occasional
telephone conversation initiated by Tellurian, Inc. regarding the performance of
Tellurian, Inc.'s equipment.
(10) Tellurian will pay Fightertown Entertainment, Inc. $22,500 in the form of a
certified check made payable jointly to Fightertown Entertainment, Inc. and its
attorney Taras Kick delivered to The Kick Law Firm 000 X. Xxxxxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx, 00000, on each of the three (3) following dates: 1) August
15, 1998, 2) August 15, 1999 3) August 15, 2000. This is a total of $67,500 in
additional payments. Fightertown Entertainment, Inc. hereby allows Tellurian
Inc., and Tellurian, Inc. agrees to affectuate, at its flight simulation
location in Niagara Falls, the
display of Fightertown Entertainment, Inc.'s logo and acknowledgment that the
flight simulation at Niagara Falls was modeled after Fightertown Entertainment,
Inc.'s flight simulation experience. Tellurian will also list the location of
Fightertown Entertainment, Inc.'s other locations, and make available
Fightertown Entertainment, Inc. literature at this sight. Fightertown
Entertainment, Inc. will have sole and final approval rights regarding the
display of its logo, use of its name and offering of Fightertown Entertainment,
Inc. information at this location, but Fightertown Entertainment, Inc. will not
unreasonably deny such approval.
(11) Tellurian Inc. will sign a Confidentiality Agreement in favor of
Fightertown Entertainment, Inc., at the time of executing this Settlement
Agreement. A true and correct copy of this Confidentiality Agreement is attached
as "Exhibit B."
(12) Tellurian acknowledges that Fightertown Entertainment, Inc., has other
options which it could pursue for suppliers of image generators and that the
technical nature of this product puts Fightertown Entertainment, Inc.'s business
in jeopardy if Tellurian fails to meet all of the obligations placed on it by
virtue of this agreement. Tellurian understands that Fightertown Entertainment,
Inc. would not agree to accept delivery of the Eagle units covered by this
agreement and would have demanded return of its deposit with Tellurian, Inc.
along with appropriate interest on those funds if this agreement were not
reached. Tellurian further acknowledges that the damages caused to Fightertown
Entertainment, Inc.'s business by Tellurian's failure to meet its obligations to
Fightertown Entertainment, Inc. is reasonably estimated at $500,000. Tellurian
also acknowledges that considerations set forth in sub-paragraphs (1) through
(11) of this sections "5. Payment" was made, and made in a timely manner.
Accordingly, contemporaneous with the execution of this Settlement Agreement,
Tellurian is executing a stipulated judgment in the amount of $500,000 in favor
of Fightertown Entertainment, Inc. to be entered against Tellurian should
Tellurian fail to comply with any term of this Settlement Agreement. Tellurian
agrees that $500,000 is a reasonable approximation of Fightertown Entertainment,
Inc.'s damages arising from a breach of any term of this Settlement Agreement,
and is in no way punitive or a punishment of Tellurian. Tellurian acknowledges
that Fightertown is relying on the timing of all consideration to be paid as set
forth in this Settlement Agreement and agrees that a failure to abide by the
timing in this agreement will cause Fightertown Entertainment, Inc. damages best
approximated by the stipulated judgment amount of $500,000. If Tellurian fails
to comply with any provision of this Settlement Agreement, Fightertown
Entertainment, Inc. may re-file and go forward with the Lawsuit against
Tellurian without prejudice. Before filing the stipulated judgment, Fightertown
will fax and mail notice of Tellurian's breach to Tellurian's attorney, Xxxx
Xxxxxxx at (000) 000-0000, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx, 00000, and
Tellurian shall have fifteen days from the date on the letter to Xxxx Xxxxxxx in
which to cure its breach before Fightertown files the stipulated judgment with
the court. If Tellurian cures the breach in this fifteen day time-frame, before
the filing of the stipulated judgment, Tellurian shall also pay an additional
$500 to Fightertown for the approximated cost of the attorney, and other, time
involved in notifying Tellurian of its breach, and pursuing the breach. A copy
of the stipulated judgment is attached as "Exhibit C."
6. Dismissals
Fightertown agrees to file a dismissal without prejudice of the Lawsuit
within twenty-four (24) hours of receiving the original signed stipulated
judgment attached as "Exhibit C" and the original signed Release Agreement.
7. Release of all Claims
Except for the obligations created by this Settlement Agreement, the
Parties, including but not limited to each of their successors and predecessors
in interest, agents, servants, employees, owners, shareholders, officers,
directors, partners, former partners, associates, former associates, attorneys,
representatives, assignees, associations, partnerships, corporations, and
subsidiaries, hereby release and discharge the other Parties hereto and their
successors and predecessors in interest, agents, servants, employees, owners,
shareholders, officers, directors, partners, former partners, associates, former
associates, attorneys, representatives, assignees, associations, partnerships,
corporations, and subsidiaries from all obligations, liabilities, claims, and
causes of action existent to the date of this Settlement Agreement, whether now
known or unknown, unforeseen, unanticipated or latent, that they may now have or
may hereafter have or claim to have had, arising out of or concerning or
pertaining to or in any way connected with any contract, tort, statutory
violation, representation, non-disclosure, act, omission to act, fact, matter or
thing whatsoever relating in any way to the Lawsuit or facts described in the
lawsuit.
8. Waiver of California Civil Code Section 1542
Except for the obligations created by this Settlement Agreement, it is
further understood and agreed that the Parties hereto waive all rights under
Section 1542 of the California Civil Code which provides as follows:
"[Certain claims not affected by general release.] A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
9. Interpretation
The Parties hereto acknowledge that each of them has been given the
opportunity to independently review this Settlement Agreement with legal
counsel, or has the requisite experience and sophisitication to understand,
interpret, and agree to the particular language of the provisions hereof. In the
event of an ambiguity, or a dispute regarding the interpretation of this
Settlement Agreement, the interpretation of this Settlement Agreement shall not
be resolved by any rule of interpretation providing for an interpretation
against the party who caused the uncertainty to exist or against the draftsman.
Parties acknowledge this Settlement Agreement was drafted by them jointly.
10. Terms Mutually Dependent
Each provision of this Settlement Agreement is mutually dependent upon
each other provision, and this Settlement Agreement shall only be effective upon
the happening of each event referred to herein.
11. Waiver, Modification, and Amendment
No provision of this Settlement Agreement may be waived until it is waived
in writing and signed by all parties hereto. Waiver of any one provision herein
shall not be deemed to be a waiver of any other provision herein. This
Settlement Agreement may be modified or amended only by a written agreement
executed by all of the parties hereto.
12. Construction and Jurisdiction
This Settlement Agreement shall be construed in accordance with, and
governed by the laws of the State of California. Any dispute which arises under
or relates to this Settlement Agreement, including terms herein, shall be
resolved in the Superior Court of Los Angeles County. The prevailing party in
any such dispute shall be entitled to recover all reasonable costs and expenses
incurred incident thereto, including reasonable attorneys' fees.
13. Authority
The undersigned parties execute this Settlement Agreement on behalf of
their respective parties and represent and warrant that they are authorized to
enter into and execute this Settlement Agreement on behalf of such parties, that
the appropriate corporate resolutions or other consents have been passed or
obtained and that this Settlement Agreement shall be binding on the party on
whose behalf they are executing this Settlement Agreement.
14. Execution
This Settlement Agreement may be executed in one or more counter-parts,
each of which shall be original, but all of which, together, shall be deemed to
constitute a single document.
15. Titles and Captions
Paragraphs, titles, and captions contained in this Settlement Agreement
are inserted only as a matter of convenience and for reference, and in no way
define, limit, extend or describe the scope of this Settlement Agreement or the
intent of any provision herein.
IN WITNESS THEREOF, the undersigned hereby agree to the terms, conditions,
and covenants set forth above, and their attorneys indicate their approval as to
the form of this Mutual Release and Settlement Agreement its execution by their
respective signatures in the appropriate spaces below.
Dated: November 24, 0000 Xxxxxxxxxxx Xxxxxxxxxxxxx, Inc.
By: /s/ Xxxxxx Xxxxxxx
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Its: President
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Dated: November 24, 1997 Tellurian, Inc.
By: /s/ Xxxxxxx Xxxx
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Its: Vice President
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Dated: November 24, 1997 /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
